Wheat market missing a spark to start a rally

The slide in the wheat market following the highs in July has slowed down in September, but North American wheat futures continue to grind lower, with no clear bottom in sight.

“There’s not a lot of new stories out there that could spark the bullish movement [farmers] want to see,” says Tyler Schau, hedging strategist with AgMarket.net, discussing the wheat market in the interview below.

Minneapolis spring wheat futures for December have been trading in the 7.50 to 7.90 per bushel range for the last few weeks, well off the highs of around 9.50 in late-July.

While farmers in many cases are storing their wheat, hoping to get back to that $9 level on the futures, Schau says the narrative around restricted wheat exports from Ukraine “seems worn-out and tired,” while yield and quality have exceeded expectations in some key spring wheat growing areas of North America.

“All summer I listened to farmers and agronomists, especially in the northern tier of North Dakota, and eastern third… yields were going to be terrible. They were telling us 40 to 50 per cent of average production, which you know, in a lot of those areas is 70 to 80 bushel wheat on average. So, we were penciling that into our spreadsheets and thinking yeah, there’s gonna be a real story here. And then all the sudden harvest comes along, and they’re average or better. I’ve heard a lot of stories, and some of those areas are telling us their crop was terrible that grew 80 to 90 bushel wheat.”

Listen to Schau and RealAgriculture’s Shaun Haney dive into what’s happening in the wheat market, including how demand is shaping up, harvest results, why the market shouldn’t be surprised by Ukraine’s ability to export grain, and more:

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